1. For a continuous review inventory control system, an decrease in the inventory holding cost per unit should cause

a) fewer orders per year.

b) more orders per year.

c) no change in the number of orders per year.

2 If the order size (Q) is decreased 10% below its optimal value, then how will the total cost likely change?

a) decrease by 10% or more.

b) decrease by less than 10%.

c) increase by less than 10%.

d) increase by 10% or more

3 Increasing variability in inventory levels as one moves upstream in the supply chain is known as

a) reverse logistics.

b) the bullwhip effect.

c) just-in-time.

4 In inventory management, when a large amount of inventory is being held, it generally means there are

a) high inventory carrying costs and high stock out costs.

b) high inventory carrying costs and low stock out costs.

c) low inventory carrying costs and high stock out costs.

d) low inventory carrying costs and low stock out costs.

5 A production system based on high quality, small lot sizes and low inventory is

a) economic order quantity.

b) just-in-time/lean.

c) continuous flow.